National Reform Programme 2018

The French economy has great innovative potential and enjoys many assets, which have enabled it to weather the various recent crises without coming to an abrupt halt. And yet, for nearly three decades, the French economy has repeatedly lagged behind and suffered from inaction due to a lack of reform, with the most obvious consequence being the persistence of mass unemployment. The French economic and social model – the legacy of the postwar economic boom – has ground to a halt, and can no longer ensure either prosperity or social justice.

France has not yet shifted from playing «economic catch-up» to an economic model of innovation, able to take full advantage of new opportunities.

Accordingly, the country is suffering from a three-fold economic deficit: w An employment deficit – whereas most similarly-developed countries enjoy full employment, France is handicapped by a high unemployment rate, which only a year ago stood at 10%. For 30 years, the youth unemployment rate has never been less than 15%.

An innovation deficit – France’s potential annual GDp growth is currently estimated at 1.25%, which is also lower than in similar countries. France has not invested enough in innovative technologies, companies lag behind in making the digital changeover and economic stakeholders are still too risk-averse. Our education and training systems have also become less effective over the years.

A public deficit – the ratio of public spending to GDp is the highest of all the OECD countries (55.1% in 2017, excluding tax credits). The result is one of the highest aggregate tax and social security contribution rates in the OECD (45.4% of GDp in 2017, excluding tax credits), which acts as a damper on both businesses and households. However, despite the resources the country has deployed, public services do not always meet expectations, nor have they kept pace with changes in lifestyles.

This triple structural deficit has prevented the French economy from fully benefiting from global growth and new technologies. It has also slowed the country’s recovery following the 2008 economic and financial crisis.

Socially, French society has become increasingly fragmented. The founding principles of the country’s postwar social contract have crumbled away:

Merit is no longer sufficiently rewarded, both in school and in professional life. Work does not pay enough and no longer offers real prospects.

National solidarity is struggling to adapt to the needs of our times. Our welfare state no longer offers fair and just protection for citizens.

Cohesion, regional cohesion in particular, is being called into question: the growth gaps between prosperous urban areas and less well-connected regions are widening.

In addition to these inherited social and economic challenges, there are new ones, which are shared by all countries. The digital revolution is upending our ways of producing, consuming and living together. At the same time, climate change is a reality that makes it imperative that we change our society and bring about the ecological transition.

The programme that president Macron submitted to the vote of the French people during the May 2017 presidential campaign is a coherent, far-reaching and balanced plan to transform the French model in keeping with France’s strong European ambitions. The parliamentary majority was built around this project, and the cabinet began implementing it as soon as it was appointed in June 2017.

The National Reform programme is built around four key areas of change detailed below.